Consumer sentiment continues to oscillate at an elevated level. Positive signs for the broader economy are apparent in the survey. House price expectations rose once again, hitting yet another new high, led by Auckland. Few surprises there. Success has its challenges; confidence in Auckland fell. What’s good for some (home owners) is not good for others (potential first home buyers).
‘Life still goes on’ for consumers amidst international shenanigans.
- Consumer sentiment continues to oscillate at an elevated level.
- Positive signs for the broader economy are apparent in the survey.
- House price expectations rose once again, hitting yet another new high, led by Auckland. Few surprises there.
- Success has its challenges; confidence in Auckland fell. What’s good for some (home owners) is not good for others (potential first home buyers).
The ANZ-Roy Morgan Consumer Confidence Index dipped a smidgen in July from 118.9 to 118.2, but that’s holding in at levels of elevation, and in line with its historical average. In seasonally adjusted terms confidence rose from 118 to 119, the second monthly rise in a row.
July’s survey had a ‘let it ride’ element, with most components moving by small margins.
Consumers are ‘free wheelin’.
- Consumers feel better off financially. A net 9% feel better off compared to a year ago, down a touch on last month’s reading of +10 (our seasonally adjusted estimate went from +9 to +11). Given an improving labour market and house price growth, ‘you ain’t seen nothing yet’.
- A net 36% believe it is a good time to buy a major household item, unchanged on last month. That should have big ticket retailers humming ‘gimme your money please’. The high NZD will be helping.
- Forward-looking indicators continue to ‘roll on down the highway’. Net optimism regarding both the short-term and longer-term economic outlook were down slightly but unchanged / up in seasonally adjusted terms. A net 29% expect to be better off financially in 12 months’ time.
- Both the Current Conditions and Future Conditions indices were down by a small amount but up marginally seasonally adjusted terms. Little news here. The former is consistent with a robust pace of spending across the economy and the latter suggesting a continuation of the same.
There is a lot to smile about. The labour market is improving. Job ads have risen now for five consecutive months. Skill shortages are becoming more of an issue for businesses. Both bode well for the final piece of the labour market puzzle, namely wages, to start moving up.
House price expectations continue to lift – another traditional positive factor for sentiment – hitting another new high. Expectations surged among those most likely to buy; those in the 25-34 and 35-49 age brackets set new ‘sky’ highs. Expectations across Auckland rose to 8.4%, also the highest we’ve seen since the survey started.
Amidst soaring house prices, it was notable to see sentiment actually wane in some consumer segments. Auckland is now one of the weaker (less upbeat) regions across the economy, and the 25-34 year old’s current conditions index moved sharply lower (see chart below). With each passing week, and movement in house prices in excess of income growth, affordability and the ability to save that deposit worsens. Who wants to get caught in that traffic gridlock anyway?
Click here to download the latest ANZ-Roy Morgan New Zealand Consumer Confidence Release PDF - July 2016.
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The latest Roy Morgan Consumer Confidence Monthly Report is available on the Roy Morgan Online Store. It provides demographic breakdowns for Age, Sex, State, Region (Capital Cities/ Country), Generations, Lifecycle, Socio-Economic Scale, Work Status, Occupation, Home Ownership, Voting Intention, Roy Morgan Value Segments and more.
You can also view our monitor of Quarterly New Zealand Unemployment & Under-employment Estimates.